DULLES, Va., Tue Apr 17, 2012 – AOL Chief Executive Tim Armstrong’s compensation declined to $3.2 million in 2011 from some $15.3 million in the prior year, according to a regulatory filing.
The 41-year-old former Google executive did not receive any stock rewards or options in 2011 and received a base salary of $1 million, which remained unchanged from 2010.
The proxy filing also urged shareholders not to vote for the activist hedge fund Starboard Value’s slate of board nominees.
Starboard, which spun off from Ramius LLC in March 2011, launched a campaign late last year to shake up AOL. The hedge fund holds a 5.3 percent stake in the Internet company and has grown increasingly hostile, proposing its own slate for directors to address what it describes as AOL’s strategic failings.
In a letter fired off to the AOL board, Starboard called for AOL to pursue a sale of certain assets including its patent portfolio.
In the filing, AOL disclosed it was willing to nominate two new independent directors that “were mutually agreeable to the company and Starboard” to avoid a proxy fight. AOL board director Fredric Reynolds later proposed a settlement after Starboard’s stake in the company increased to 5 percent.
After AOL agreed to sell the majority of its patents to Microsoft for $1 billion on April 9, Reynolds again reached out to Starboard CEO and founder Jeffrey Smith to discuss whether they could resolve the dispute.
According to the filing, Smith was willing to reconsider his position only if the company would return all the proceeds of the patent sale to shareholders.
AOL had said it planned to return a “significant portion.” In its conversations with Starboard, AOL said it could not commit to a specific profit amount but it was willing to re-examine some of Starboard’s business strategies.
Starboard rejected AOL’s proposal, the filing said.